This was the first time any government document had tied Alex Gorsky to the Risperdal scandal. It did so in unrelenting detail, with each point followed by a reference to a document that the government had obtained through subpoenas to Johnson & Johnson and Janssen:
• “From October 1998 to October 2001, Mr. Gorsky was Janssen’s Vice President of Marketing, and from October 2001 to early 2003 he was President of Janssen.”
• “During all of that time he was responsible for selling Risperdal, a drug whose biggest customer was Omnicare.”
• “He regularly received Monthly Reports on J&J’s Long Term Care Group, including reports which commented on Omnicare’s efforts to promote prescribing of Risperdal and other J&J products.”
• “He met repeatedly with senior Omnicare executives to discuss those efforts.” (The meeting dates were then listed.)
As the government’s brief went on, the description of Gorsky’s involvement got more specific, as if the prosecutors meant to tighten the vise on the incoming CEO of the Credo company.
• “In advance of the May 1, 2000, meeting with Omnicare, for example, he received information that Risperdal’s 53.3% market share of Omnicare ‘represents Omnicare’s ability in persuading physicians to write Risperdal in the areas of Behavioral
Disturbances associated with Dementia.’” (This was a quote from a document, referenced as an exhibit to the brief.)
• “As Vice President of Marketing and having previously worked closely with J&J’s Medical Development group (which was responsible for developing clinical trial data for Risperdal), he was in a position to know why J&J chose not to inform Omnicare (or members of Jansen’s own sales staff) that, in January 1999, the Food & Drug Administration (‘FDA’) had warned J&J that marketing Risperdal as safe and effective in the elderly would be false and misleading.”
• “Likewise, he was in a position to know why J&J did not disclose to Omnicare executives that, in 1999, the FDA had rejected J&J’s attempt to get approval to market Risperdal for treatment of psychotic and behavioral disturbances in dementia (by far the most prevalent use of Risperdal in Omnicare-served nursing facilities) because of inadequate safety data.”
• “Mr. Gorsky was also involved in approving payments [for data] to Omnicare under the 2000 Consulting and Services Agreement.”
In short, the reason Johnson & Johnson’s incoming CEO was needed to testify didn’t have to do with his current position. It was all about the positions he had held and been promoted from—the positions where he had demonstrated that he had the right stuff to lead the entire company, according to the board that had just anointed him. It was simply a matter of getting a company marketing manager, who happened to have become the CEO, to explain his conduct on the way up the ladder.
“We wanted to deal with everything at once,” recalls one Johnson & Johnson lawyer. “Just pay and be done with it all. And so did the government.”
It seemed like a strong argument. But the government actually didn’t care much about getting Gorsky’s deposition. This was all part of the chess game, which by the early half of 2012 was being played across a national map. Boston had its Risperdal/Omnicare investigation. And Philadelphia had its qui tamsuitsbrought by Vicki Starr (and, by now, four others in a group Sheller was leading) involving the broader off-label marketing allegations. There was even a smaller-bore federal investigationin San Francisco related to the marketing of another Johnson & Johnson product, the heart failure drug Natrecor.
Boston Risperdal Omnicare Complaint Philadelphia Qui Tam Complaint San Francisco Complaint “We wanted to deal with everything at once,” recalls one Johnson & Johnson lawyer. “Just pay and be done with it all. And so did the government.”
For that reason, and because of the stakes and the big-name company involved, the Justice Department in Washington was now calling the shots. The man in charge was Tony West, who had been head of the Justice Department’s civil division, but had since been promoted to associate attorney general.
Assistant Attorney General Tony West projected a “sense of disgust” at the conduct of drug companies. Getty Images
Although West had been a corporate lawyer in San Francisco, one line in his resume suggested that he was a bit more of a free spirit than other colleagues who rotate from corporate defense practices to the government and back again. In the aftermath of the September 11 attacks, while working at his San Francisco firm, he had vigorously defended, pro bono, John Walker Lindh, the alleged “American Taliban,” who had been captured and tortured by American soldiers in Afghanistan. In fact, West’s work for Lindh, which included charging the Justice Department with a variety of abuses, had almost sidetracked his Senate confirmation when President Obama appointed him to the Justice Department in 2009.
“Tony was determined to make a mark with these drug cases,” says one defense lawyer. “He really projected a sense of disgust with the whole thing.”
West allowed the talks in Philadelphia to proceed. That was the place where the offenses likely to yield the most money (through the qui tam false claims) were being negotiated. But he kept close tabs on their progress and made it clear that he would be involved in the final deal. Negotiations between the two sides in Philadelphia, which had begun in 2011, had proceeded into spring 2012 according to what had become something of a standard script. It was a script that had been followed in deals for off-label offenses that had been completed, with West signing off, in Philadelphia with Eli Lilly (in 2009), AstraZeneca (in 2010) and Novartis (also in 2010); and in Boston with Pfizer (in 2009) and Merck (in 2011). In fact, for the drug companies, it was
sometimes the same lawyers representing different clients who were called in to lead the negotiations.
“We knew how this was going to be played,” recalls a defense lawyer who had been involved in one of those earlier deals and who was also involved in the J&J negotiations. “We also knew that these guys had a habit of wanting to raise the bar, so that if Lilly had paid $800 million and the guys they competed with in the Boston office had gotten $2.3 billion from Pfizer [although that involved allegations of four illegally marketed drugs], they were going to come after us hard.” As was generally true in those cases, initially, the lawyers for the drug companies—one or two partners and a few lower-level associates each from as many as three different law firms hired by the company—would troop into a conference room at the prosecutor’s office and protest to Philadelphia U.S. Attorney Zane Memeger’s assistants that their client had done nothing wrong. The meeting might last an hour or two, during which the government would flash hints of its evidence and the defense lawyers would say something about how flimsy it all sounded.
The defense lawyers’ bills, at hourly rates of $400 to $1,000, totaled 7 to 12 thousand dollars an hour.
Sometimes Memeger would drop in to ask how things were going. It would all be friendly. Memeger, an affable lawyer with a sterling resume, was part of the club. He had won awards as a government prosecutor before becoming a partner and white collar crime specialist at one of Philadelphia’s largest corporate firms. He had then been appointed U.S. attorney by Obama in 2010, allowing him to catch the tail end of the office’s high profile drug cases.
Months would go by as the government continued to examine documents and talk to witnesses, including some who would be put before a grand jury because this was proceeding as a criminal case, as well as a civil case potentially involving damages for false claims.
Then the defense lawyers would return and allow as how maybe some salespeople had gone off the reservation and done things they shouldn’t have done. The prosecutors would chuckle or feign outrage, and talk vaguely (or not so vaguely if the other side had managed to tempt them) about the evidence showing that higher-ups were involved and that this was all part of a
company plan. Charlene Fullmer, one of the assistant U.S. Attorneys leading the investigation, would occasionally mention an especially bad piece of evidence, according to one lawyer. One of her favorites was the fact that an entire Risperdal ElderCare sales unit had been set up. “There were innumerable meetings,” Memeger recalls. “They’d present. We’d present. Eventually, we would narrow the issues.”